The hypotheses of our proposal are: 1) In diabetes mellitus, lipids accumulate in the kidney due to increased expression of the sterol regulatory element binding proteins SREBP-1 and SREBP-2.2) Increased expression of SREBPs result in accumulation of triglycerides and cholesterol and cause increased expression and accumulation of extracellular matrix proteins, glomerulosclerosis, tubulointerstitial fibrosis, and proteinuria (diabetic nephropathy) by inducing increased expression of growth factors (TGF-b and VEGF) and plasminogen activator inhibitor-1 (PAl-1). 3) Modulation of renal lipid metabolism by targeting renal expression of SREBPs prevents diabetic renal disease. The specific aims of this proposal are: 1) To determine in renal glomerular and proximal tubular cells grown in the presence of high glucose or saturated fatty acids if conditional or inducible inhibition of SREBP expression prevents the accumulation of triglycerides and cholesterol, increased expression of TGF-b, VEGF, PAl-1 and increased accumulation of extracellular matrix proteins (collagen and fibronectin; 2) To determine if compared to wild type mice the renal consequences of diabetes, including lipid accumulation, increased expression of growth factors, matrix proteins, glomerulosclerosis, tubulointerstitial fibrosis and proteinuria, are prevented or attenuated in i) glomerular epithelial cell or ii) proximal tubular cell specific SCAP (SREBP cleavage activating protein) knockout mice made diabetic by injection of streptozotocin (type I diabetes), or by feeding a high saturated fat diet (diet-induced obesity and type II diabetes).